Frequently Asked Questions
Private Lending: What is it and how does it benefit you?
When we buy houses, we prefer to borrow from private individuals. Banks,
Insurance Companies, Financial Planners and Stock Brokers borrow money (from
you) through Savings Accounts, Money Markets, CDs and Bonds, at a low interest
rate and then loan the money to investors (like us) at a higher interest
rate. By borrowing from private individuals, we cut out the middle man
and are able to give you a higher interest rate. Why would we do
this? Having the cash readily available allows us to buy at a
discount.
How Does the Private Mortgage Lender Program Work?
Once we've located a property that fits our purchasing criteria, we borrow
from you to purchase the property. We have a formal closing with a title
company and you'll receive a mortgage on the property along with several
other documents. This will secure your legal position on the
property.
Who Handles the Property?
This is one of the great things about Private Lending. You do
nothing! We will locate the property, negotiate the best deal close the
property and then make sure you receive all the documents. We then
rehabilitate the property (cosmetic repairs like paint, carpet and appliances)
bringing everything to code. Next our property manager will prescreen and
locate quality tenants to occupy the properties and collect the money. At
no time, will you have to deal with the tenants or property. We will see
that all bills are paid including maintenance, insurance and taxes. Your
job in the process will be to receive your monthly interest check.
How Do You Get Paid?
We borrow the money at 8% interest and make monthly payments to you. We
place a 6 year balloon in the note, allowing you to get your principle sooner,
thereby giving you the opportunity to invest again in other projects of your
choosing. The banks typically pay 1% - 2% and require a longer hold
time.
How Can We Buy Properties so Far Below Market Value?
As real estate investors and coaches, we know where to look, what to buy, and
what not to buy and how to renovate. We purchase small multifamily units
meeting specific parameters that will allow us to maximize the
property. Value is created by taking ugly vacant properties,
renovating them and putting tenants in them, which in turn improves the
community. Through our connections, we are able to buy in bulk and at a
discount, finding deals that just don't otherwise exist.
What Documents Secure Your Investment?
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- Hazard Insurance Policy
- Promissory Note
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Lenders have no expense during this process.
- Our #1 Rule: The money borrowed is no more that 65%
loan to value after renovation. What does that mean? If the
property is worth $100,000 after repair, you won't be lending any more
than $65,000. (This is additional security for
you. We know you know from a lot of TV ads where they'll go out and
they'll give you 125% on your money. We don't do that; our paycheck is in
what's left over in that property when we sell it. So we don't and
won't over leverage.)
Take Control of Your Future!
-
If you loaned $50,000 at 8% interest, you'd receive
$4,000 in interest annually. That's passive income
(no work on your part) - the best kind!
-
A bank CD at 2% on the same amount pays only $1,000 annually.
-
That's a difference of $3,000 PER YEAR!!! This does
not include some of our other additional incentives.
Invest With Your IRA or Pension Plan
Do you have money in an
IRA or 401K Pension Plan? Did
you know you can self direct your IRA (Traditional and Roth) or pension
plan? Did you know your returns stay tax deferred or tax free?
It's simple, easy and we do the work. Did you know you can borrow
your cash value on your Whole Life Insurance Policies, which are earning CD
rates of return? You would then loan back out to us to purchase
properties. You earn 8% instead of 2% or less!
What's The Next Step?
Give us a call at 888-548-8450 or send an email with any questions you may have
to
lending@scioncap.com. We look forward to working with you.
